Things I wish my younger self knew about money

Do you have any money regrets? Something you wish you had done differently? Most of us do. To put it in perspective, over two-thirds of Americans have at least one financial regret in their lifetime[1]. These money tips can help you avoid those regrets!

When I look back at my early 20’s, there are so many things I could have done differently to put myself in a better financial position today. But as the saying goes, hindsight is 20/20. And let’s face it: when you’re young, saving for retirement or budgeting are the last things on your mind. 

But I’m not going to dwell on the what-ifs. Instead, I will share with you 10 of the best money habits I learned while working in banking. All of them are things I wish I’d known sooner.

1. Build Your Financial Literacy

Have you ever heard the saying knowledge is power? Then it should come as no surprise when I tell you that wealthy people are more financially literate than less wealthy people. 

According to a study of 600 millionaires in America, building wealth is directly related to how financially literate you are, not how smart you are[2]. The more financial knowledge you have, the better decisions you will make with your money. 

👉 Take Action:

Take some time out of every day and build your financial literacy by learning about earning, saving, investing, borrowing money, etc. Make sure to teach your kids the importance of building theirs early on so they can develop healthy money habits. 

2. Set a Budget 

Do you ever feel like your money somehow evaporates after the direct deposit hits your account? I had that feeling every month before I learned how to budget.

Budgeting helps you create financial goals, track where your money goes each month, and stop living paycheck-to-paycheck. I know budgeting has changed my relationship with money, and I can guarantee it will help you too. 

👉 Take Action:

You can start budgeting today by categorizing all your transactions using the budgeting tool that works for you, and then choosing a preferred budgeting method to set money goals and use your paycheck more smartly. 

3. Make Sure Your Money Keeps up With Inflation 

Every day your money is sitting in a checking account collecting dust, it’s losing value due to inflation. The cost of goods and services keeps going up, and your money is simply not keeping up with it because it’s losing purchasing power.

For example, if you paid $8.93 to buy a movie ticket in 2017, you’d need $9.16 to buy that same ticket in 2019.

So what can you do about it? 

👉 Take Action:

Put your money in a high-interest savings account, or invest it. Of course, some of it is going to stay in your chequing account to pay for bills, groceries, and day-to-day necessities, but if you’re not using it, don’t let it sit around losing value.

💡 Saving or investing doesn’t mean your money has to be inaccessible to you. You can put it in an account or an investment that is easily accessible in case of an emergency.

4. Invest 

Investing used to seem like a very risky business to me. I thought if I invested, my money would be out of reach and vulnerable to market fluctuations. But my fear came from not knowing anything about investing or taking the time to educate myself.

Once I overcame the fear of investing, I realized that it was a valuable tool to grow my wealth. I started with a small amount I was comfortable with and gradually became more confident. But don’t just take my word for it. Investing is one of the top money habits of Americans who managed to build wealth from scratch[3].  

👉 Take Action:

Learn about investing and read our guide on Where to Invest as a First-Time Investor in 2021 before you take the plunge.   

5. Have Multiple Sources of Income 

Do you know what wealthy people do besides investing? They maximize their cash flow by having multiple sources of income. This includes their day job, investments, or side hustles, to name a few. 

Since the start of the Covid-19 pandemic, you’ve probably noticed that more people have discovered creative ways to make extra income, and there’s never been a better time to join them. You will earn more money, learn new skills, and never have to depend on one salary for your livelihood. 

👉 Take Action:

Learn how to make extra income today and check out how you can earn an extra $1,000/month with this fun side gig!

6.  Save With Purpose 

One of the most important financial habits you should build from a young age is saving money. It’s the building block of financial independence, it gives you peace of mind, and it’s there when you have important life milestones.

If I could go back in time, I’d tell my younger self to always save with a purpose in mind. Whether it’s for a down payment on my first home or an emergency fund, making a specific savings goal will be much more effective than saving for the sake of saving. 

👉 Take Action:

Learn how to set a savings goal using a proven formula. 

7. Learn to Build Good Credit 

Instead of teaching us how to play “Hot Cross Buns” on a recorder, I wish school would focus more on teaching real-life skills like building and maintaining good credit. 

It was not until I started working in banking that I fully understood what credit scores meant and the importance of building good credit. During this time, I realized how many young people were failing to build any credit history at all or unknowingly hurting their credit scores. 

👉 Take Action:

8. Plan for Retirement (Even if It Seems Too Early) 

When you’re young, retirement is not exactly at the top of your hierarchy of needs. You think you will have plenty of time to save for it, and there’s no rush. 

But what if I told you that saving for retirement can be extremely easy, and the earlier you start, the more money you will have when you retire. 

👉 Take Action:

Open a retirement account and contribute a portion of every paycheck to it. I promise you won’t even feel it missing and that money will keep growing over time. In many cases, your employer may offer matching contributions, so that’s more money in your pocket!

9. Learn About Taxes 

Learning about taxes and having at least a basic understanding of how they work can save you a lot of money in the long run. 

For example, did you know that contributing to a retirement plan can reduce the amount of taxes you pay every year? Or that you can maximize your tax refund by knowing about certain tax deductions? Whether you have a traditional job, are self-employed, or have investment income, the more you know, the more money you can save. 

👉 Take Action:

If you’re filing taxes for the first time, learn what you need to do to prepare and find out how to get a bigger tax refund. 

10. Don’t Give Into Consumer Culture

One of the most important money tips I could give my younger self (and anyone for that matter) is to not give in to the toxic culture of consumerism. It relies on instant gratification and convinces you a certain product, outfit, or makeup will improve your life. And guess what? It won’t.

Now I’m not saying to live like the extreme cheapskates on TLC, but most of us can make smarter decisions with our money. Don’t let yourself be swayed by social media apps like Instagram and TikTok, which constantly encourage you to spend money on things you don’t need. They call those people “influencers” for a reason: their job is persuading you to buy things you don’t need. Someone will always fall for it, but it doesn’t have to be you!

👉 Take Action:

Before you buy anything, ask yourself if you truly need it. If the answer is no, put the money you would have spent in a savings account or invest it. And repeat after me: Just because I have extra money does not mean I have to spend it.

Over to You

Whether you’re fresh out of school or retired, it’s never too late to put some of these habits into practice. If you’ve found this advice helpful, pay it forward to someone you think might also benefit from it.

What’s the #1 money tip you would give your younger self? Let us know in the comments below!